Identify Which of the Following Statements Is True

question 48

Multiple Choice

Identify which of the following statements is true.

• A)When adjusting a partner's basis in a partnership interest, the negative basis adjustments are made prior to the positive basis adjustments.
• B)Martin and Carlos formed an equal partnership to which Martin contributed $10,000 cash and Carlos contributed a building worth $10,000 with a basis of $2,000. In the first year of operation, the partnership suffered a $10,000 ordinary loss. Martin and Carlos can each deduct a $5,000 loss on their personal tax returns.
• C)Any distributive share of a loss that cannot be deducted by a partner because of the Sec. 704(d)basis loss limitation is permanently lost.
• D)All of the above are false.

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Definitions:

Digestive System

The digestive system is the group of organs responsible for breaking down food into nutrients, which the body uses for energy, growth, and cell repair.

Scurvy

A disease caused by a deficiency of vitamin C, characterized by swollen bleeding gums, bruising, and weakness.

Vitamin C

An essential nutrient and antioxidant found in fruits and vegetables, important for the repair of tissue and the enzymatic production of certain neurotransmitters.

Skin

The outermost layer of an organism's body that acts as a protective barrier against environmental hazards and pathogens.